The new Biden Labor Secretary is a big labor guy. Independent contractors should be on alert. Secretary Marty Walsh made comments days ago that signal this administration plans to crack down on independent contracting and push as many American workers back into the outdated model of work organized labor thrives on. Say ‘goodbye’ to flexibility, and ‘hello’ to union dues.

Walsh is a former union boss. He plans to execute on President Biden’s goals of boosting union membership and bringing organized labor back to prominence. 

In an interview with Reuters, Walsh telegraphed that independent contracting nationwide might be in trouble:

We are looking at it but in a lot of cases gig workers should be classified as employees… in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board.

Walsh did not hold back on his opposition to the gig economy and its use of independent contractors:

These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that’s what we are about in America. But we also want to make sure that success trickles down to the worker.

Why this matters

Marty Walsh, the last Biden cabinet member confirmed, has a long history with the unions and is reportedly the first union leader to run the Labor Department in four decades. 

Both his appointment and his comments are clear indications that protecting and increasing organized labor are priorities for the Biden White House. 

So far, the Biden Administration has proposed rescinding a Trump-era rule that would make it easier for a worker to be classified as an independent contractor.

In addition, President Biden fully supports the Protecting the Right to Organize Act (PRO Act), including it in his $2 trillion infrastructure package. This bill would apply a more stringent standard (the ABC test) to determine if a worker is an independent contractor or an employee, effectively reclassifying millions of the nation’s 57 million freelancers.

The PRO Act follows California’s AB5 law, which reclassified millions of the state’s independent contractors—from journalists to musicians. Independent workers reported losing jobs, income, and contracts immediately, as we share in our Chasing Work series. Labor costs would rise substantially as companies would have to pay benefits, time off, and comply with other labor laws. Unable to absorb the costs, many companies which contracted workers eliminated their independent contract workforce.

The PRO Act would also force non-union workers to pay union dues (banning state right-to-work laws) and could force employers to turn over the name and contact info of employees to unions for organizing and potential harassment if they don’t join.  

Why the aggressive push for unions? 

Over decades, private-sector union membership has fallen, hitting their lowest levels in the past couple of years. American workers no longer see the value in organized labor. They are able to negotiate the pay, packages, and flexibility they want directly with their employers. Companies are also expanding worker benefits and increasing flexible arrangements to attract and retain workers.

In addition, independent contracting through the gig economy has made independent, flexible work more accessible, especially during the pandemic. It’s not surprising that Amazon warehouse workers overwhelmingly rejected a bid to unionize last month.

Unions can’t deliver on flexibility; they need big numbers of workers clocking hours on fixed schedules. Until they can change their value proposition, they will continue to bleed support. Perhaps that’s why President Biden plans to use every lever to help unions. We should expect legislative and regulatory action to achieve these ends, which makes every voice of opposition so critical.

What American workers want is flexibility. Most independent contractors choose this arrangement for flexibility. For women, who tend to be caregivers, flexibility is even more valued than the benefits of a traditional job.

Many workers who have had a taste of working from home or working on their schedule, may not want to go back to a 9-to-5 job. 

Women and younger workers are especially interested in the flexibility that independent contracting provides. They haven’t been interested in unions. Walsh aims to change that, noting in the Reuters interview that organized labor must reintroduce itself to younger workers.

Workers know what they want, but I don’t think this administration wants to listen.